By Angela Palumbo

Walt Disney stock might face some turbulence in the months ahead, but there are still multiple reasons to buy, one BofA Securities analyst says.

Jessica Reif Ehrlich wrote in a research note on Monday that Disney's first-quarter financial results, due at the beginning of February, might be "mixed." Yet her call on the stock implies a potential gain of 25% from Friday's closing price.

Disney makes money in a multitude of ways, including its theme parks, popular film franchises, and streaming services. Only some of these businesses have been a slam dunk for Disney; Ehrlich expects the results to show the others have faced headwinds.

The box-office results have been less than overwhelming. Ehrlich wrote that the animated film Zootopia 2 performed well in the quarter, ranking as the fifth-best domestic box-office performer in 2025. It grossed $337.9 million even though it was released toward the end of the year on Nov. 17.

But offsetting that is a softer performance in some of the live-action titles in the quarter, she said. Disney's Tron: Ares, for example, came out on Oct. 10 and grossed $73.2 million.

The experiences segment -- it includes theme parks and cruise lines -- will be "impacted by attendance headwinds, particularly from international visitors at domestic parks along with cruise ship pre-opening and dry dock costs," she said.

Still, Ehrlich rates Disney as a Buy with a $140 price target, compared with the Friday closing price of $111.85. Shares of Disney closed up 2% to $114.07 on Monday.

The stock only gained 2.2% in 2025 as competition in the theme-park business intensified with the opening of Universal's Epic Universe. Traditional, linear television continues to struggle as streaming becomes more popular.

Ehrlich thinks the stock can bounce back. She pointed to positive streaming trends in the entertainment space, such as higher prices helping profitability, as one reason for continued optimism. A growing cruise-line fleet in the experiences segment was another.

Disney stock is also cheaper than shares of some competitors. It is trading at 17 times the earnings per share expected over the next 12 months, which is below its 5-year average of 25 times, according to Dow Jones Market Data. Netflix is trading at 28 times.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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January 05, 2026 16:35 ET (21:35 GMT)

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